Fashnopsis:
- Boohoo faces shareholder revolt over £1 million bonuses for executives despite a £160 million loss.
- Discontent centers around bonuses awarded during a period of falling revenue and rising competition.
- Shareholders plan to reject both the bonuses and the new executive incentive plan at the AGM.
- Investors criticize the lack of transparency and disregard for shareholder concerns.
- Boohoo struggles with a tough economic climate and needs to regain investor confidence.
Investors at Boohoo Group are poised to stage a rebellion against the company’s decision to award £1 million in bonuses to top executives, a move coming amidst a staggering £160 million loss reported by the fashion retailer.
The Times reports that discontent is brewing among major shareholders concerning the new long-term incentive plan for executives. This plan includes bonuses for co-founders Mahmud Kamani and Carol Kane, as well as CEO John Lyttle.
Anger stems from the bonuses being awarded despite a 17% drop in revenue and comes as Boohoo faces a multitude of challenges. These include a rising cost of living impacting consumer spending and increased competition from rivals like Shein.
A top-five shareholder voiced their outrage, stating they would vote against the payouts at the upcoming annual general meeting (AGM). They find it unacceptable to reward executives with bonuses during a period of significant financial decline.
Shareholders are also taking aim at Boohoo’s revamped executive incentive plan, with one large investor calling it “outrageous” and criticizing the lack of shareholder consultation before its implementation.
Boohoo, once a darling of the fast-fashion industry with celebrity endorsements, is now facing a difficult period. The company must navigate a complex economic landscape and fierce competition to regain shareholder confidence.
Image Source: Boohoo
